East African Breweries Limited saw its full year net profit reduce 1% to 6.96 billion shillings on the back of depressed sales and tax charges.
The brewer says COVID-19 related restrictions as well as a general reduction in disposable incomes across the countries it operates negatively impacted its business.
The confirmation of Covid cases in Kenya and Uganda saw the countries impose measures aimed at containing the spread of the coronavirus.
This included closure or reduced capacity in bars, restaurants as well as wines and spirits outlets.
In addition, Kenya and Uganda introduced curfews and restricted movements in some regions.
“Kenya had the harsher restrictions from the covid impact, Tanzania really did not shut down while Uganda has also had challenges not as serious as Kenya. We are happy with the growth because it has been achieved under very tough trading environment,” said Jane Karuku, EABL Managing Director.
Uganda registered the highest year on year sales growth at 33% followed by Tanzania at 15%, and Kenya 10% while total group sales grew 15% during the period under review.
To weather the tough operating environment, East African Breweries Limited says it invested in brands, expanded capacity and sustained productivity initiatives which helped grow its net sales by 15% to Kshs. 86 billion from Kshs. 75 billion in 2020.
“This improvement has also been aided by the relaxation of COVID-19 restrictions made in Kenya which contribute over two thirds of our revenues,” added Dr Martin Otieno Oduor, EAB Group Chairman.
Kenya contributed 66% to the group’s net sales with Uganda contributing 19% and Tanzania 15%.
The net sales marginal decline was on account of the impact of cost inflation, adverse foreign exchange and tax charges.
Group profit before tax was however up 2% to Ksh 10.9 billion during the period.
“From a gross profit perspective, we have grown 13% year on year in absolute terms delivering Kshs. 37 billion in gross profits compared to Kshs. 33 billion in 2020 and Kshs. 38 billion in 2019,” said Risper Ohanga, EABL Chief Financial Officer.
The firm plans to focus on business recovery to grow top line and recover margin recorded before coronavirus pandemic in 2019.
The firm has not declared any dividend payout attributing the decision to continued uncertainty due to COVID-19 related restrictions.